This essay has been highlighted the concept of Economics assignment. In this connection, this study tried to focus to the demand and the supply of a definite product. Therefore, in this purpose, the products of Adidas have been selected. It can be seen that the demand for the products of Adidas Apparel has been increased with the increasing of time. This will help to enhance the production of the products of Adidas within the mentioned country. In addition, with the increase in the requirement for the products, there may arise two probable situations, which would be discussed in this study. In this occasion, this study has also been discussed the influential factors, which can affect the demand for the mentioned products as well as the supply and the production of the products. The influential factors such as the level of income of the buyers, their demographic condition have been described in this following study.
Demand and supply of the products of Adidas in Australia and the factors that affect the demand as well as the supply sides of the market
According to Bachelor (2013), the demand for the products of Adidas such as sports shoes, clothing, gym wears as well as accessories in Australia has been rising over time. In this connection, it can be mentioned that the citizens of Australia are concerned about the brand or their figure, that they would like to go the gym. As a result, they need to purchase the items, produced by Adidas. Moreover, it can be stated that the total revenue earned by this company in the year of 2015 was $266,196,000. This proves that the demand for these products were comparatively higher. Instead of this, the trend of this consumption has been increasing effectively from the past few years. In the words of Bowen and Sosa (2014), this consumption level also can be determined based on the customer’s taste and preferences. In this context, it can be predicted that the increase in demand for the products will increase the supply or the production of the products by the mentioned company. Based on the taste and preferences and the requirements, the company manufactured the items. This will significantly enhance the profitability of the company. Furthermore, Bruneel et al. (2012) suggested that the consumers are looking for varieties of goods, innovations. As a result, the company can focus to the development of the manufacturing procedure.
It can be identified that the rise in the demand of a specific item will successfully expand the supply of the products. Moreover, the consumption of the sports shoes has been reached to the largest peak as stated by Fleury et al. (2014). Therefore, in this aspect, there may arise two probable situations. If the demand for a particular product massively increases, then the company may not supply the products by that amount. In this case, the price for the particular product will increase. As a result, the demand for the product may fall and the consumers may reluctant to purchase the particular product. On the other hand, the second case can be discussed as the demand may not fall with the rise in the price of the product. This will happen in case of giffen goods. As per the statement of Obizhaeva and Wang (2013), this violates the law of demand. Hence, in this purpose, it can be mentioned that if the sports shoes of Adidas are seemed to the giffen goods, then with the rise in price, the demand as well as total sales by the company will not decrease. As a result, in this scenario it can be stated that most of the consumers are brand conscious and they would not like to purchase the same product from the other sport shoe manufacturing company. Therefore, in case of the giffen goods, the substitution effect would be compensated by the income effect.
The above figure depicted that in case of giffen goods, the demand for the particular item will not reduce with the increase of price. It will remain equal as previous. Hence, if the price increases from P0 to P1, the demand for this particular product will also rise from Qo to Q1. As a result, the demand curve is upward sloping.
In order to describe the influential factors, Piller, Lindgens, and Steiner (2012) mentioned that it will be beneficial to recognise the factors, which can affect the demand and the supply of products of Adidas in Australia. The production of the factors depends upon the growth of preferences and the increase of demand. As a result, it can be mentioned that the supply of the products and volume of sales of the company will be fruitfully increased. Furthermore, the demand and the supply of the products are also based upon the taste and the preferences of the buyers. This will fetch the demand and the supply of the factors.
On the other hand, the requirements for the products of Adidas depend upon the level of income of the buyers. In this purpose, it can be mentioned that the prices of the products are the reflecting factors, which can estimate the demand. Roberts and Schlenkera (2013) mentioned that higher the level of income, greater will be the demand for the products and the supply for the items.
Moreover, in case of the giffen goods, the higher income group people can afford the higher price of the manufacturing goods. Hence, the supply of the products will also rise. As a result, the suppliers will be profitable. Nevertheless, Shultz (2014) criticised that the lower income group people will not be able to afford the higher price and in that case the supply will decrease.
The overall study has been constructed on the on the notion of Economics assignment. In this context, the requirement for the products of Adidas has been considered. After the analysis, it can be observed that the demand for the products of Adidas has been increasing with the rise in time. As a result, the production has also increasing. On the other hand, the influential factors, which can affect the demand of the items, have also been discussed in this essay.
Bachelor, O., 2013. determining safety stock for an adidas apparel factory applying probabilistic demand model(doctoral dissertation, vietnam national university).
Bowen, W.G. and Sosa, J.A., 2014. Prospects for faculty in the arts and sciences: A study of factors affecting demand and supply, 1987 to 2012. Princeton University Press.
Bruneel, J., Ratinho, T., Clarysse, B. and Groen, A., 2012. The Evolution of Business Incubators: Comparing demand and supply of business incubation services across different incubator generations. Technovation, 32(2), pp.110-121.
Fleury, F.A., Cardoso, M.V., Fouto, N.D., Vance, P. and Marques, R., 2014. the impact of the stadium in the supporter’s consumption: how does the frequency at the stadium boosts the demand for the clubs’products.
Obizhaeva, A.A. and Wang, J., 2013. Optimal trading strategy and supply/demand dynamics. Journal of Financial Markets, 16(1), pp.1-32.
Piller, F.T., Lindgens, E. and Steiner, F., 2012. Mass Customization at Adidas: Three Strategic Capabilities to Implement Mass Customization.Available at SSRN 1994981.
Roberts, M.J. and Schlenkera, W., 2013. Identifying supply and demand elasticities of agricultural commodities: Implications for the US ethanol mandate. The American Economic Review, 103(6), pp.2265-2295.
Shultz, D., 2014. Competing in a Commodity World.